What Are the Consequences for Pastors Who Don’t File Tax Returns?
What Are the Consequences for Pastors Who Don’t File Tax Returns?
Some ministers incorrectly believe they are exempt from taxation.
PAGE 2 of 3Single Page
  1. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent (or 15 percent) failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $210 or 100 percent of the unpaid tax.
  2. These are some of the civil penalties the IRS can assess if a taxpayer fails to file a tax return and pay taxes. Other penalties may apply, as well as interest.

The calculation of penalties can be a difficult task. The services of a CPA can be invaluable in such cases. And, be sure all clergy staff members understand the quarterly estimated tax procedure.

In addition to the civil penalties listed above, a taxpayer can be subject to criminal penalties for a willful attempt to evade taxes. Criminal liability requires an affirmative act (typically filing a false return). Omissions are generally insufficient. Tax evasion is a felony punishable by a fine of not more than $100,000 or a prison sentence of up to five years or both. But civil penalties are much more likely, as few ministers are convicted and imprisoned for tax crimes.

Related Topics:
Posted: March 14, 2019

Like This Article?

If you enjoyed reading this article, get more like it. Become a Church Law & Tax member today.

Learn more

Already a member? .

View All
from our store
2020 Church & Clergy Tax Guide

2020 Church & Clergy Tax Guide

Find comprehensive help understanding United States tax laws as they relate to pastors and churches.
12 Law & Tax Guidelines for New Ministers

12 Law & Tax Guidelines for New Ministers

Essential knowledge to ensure legal and financial clarity and integrity in ministry.
Charitable Contributions Bulletin Inserts

Charitable Contributions Bulletin Inserts

Help your members give more by answering their charitable giving and tax law questions.
Understanding Pastoral Liability

Understanding Pastoral Liability

Know the situations in which a pastor is personally liable for wrongdoing.

ChurchSalary

ChurchSalary

Let ChurchSalary do the work. Get personalized compensation reports for staff and pastors.